Railways Pension Scheme Pensionable Pay
As a Railways Pension Scheme member, your Pensionable Pay is used to calculate both your pension, and your contributions to the Scheme. Due to the way in which contributions to the Railways Pension Scheme are calculated (fixed from the first Monday in July for the following 12 months), your Pensionable Pay and Contribution Pay may be different as the Scheme Year progresses.
Contribution Pay
In July each year, your Contribution Pay for the following 12 months is calculated. Your Contribution Pay is equal to your Pensionable Pay as at the 1st April of the same year, minus the Basic State Pension Deductor (75% of the Basic State Pension for RPS65 members and 150% of the Basic State Pension for RPS65 members).
For example:
Mr Smith is an RPS65 member and had a pay award on 1st July 2024, increasing his Pensionable Pay to £35,000. There were no further pay awards before 1st April 2025, and therefore on 1st April 2025, his Pensionable Pay was still £35,000.
In July 2025, his Contribution Pay would be fixed at £35,000 (minus the relevant Basic State Pension Deductor).
Pensionable Pay
For members of the Network Rail Section of the RPS, your Headline Salary isn’t necessarily equal to your Pensionable Pay, as a result of the Pensionable Pay cap, which was introduced in 2012.
Pensionable Pay Cap rates:
Up to April 2016, the Pensionable Pay Cap was set in line with RPI plus 0.5%. From April 2016 onwards, the cap was set in line with RPI. The cap applies on a 12-month basis, from 1st April to 31st March, and is based on RPI from the preceding September.
The table below shows the Pensionable Pay Cap’s over the years, from when it first introduced in July 2012:
Prior to July 2012, Pensionable Pay was equal to Headline Salary plus regional allowances.
The introduction of the Pensionable Pay Cap essentially means that if you receive a pay award above the Retail Prices Index (RPI), then your Pensionable Pay will not increase as much as your Headline Salary does.
Where the Pensionable Pay Cap is lower than a pay award, the pay award is applied in full to a member’s pensionable pay.
For example:
Promotions – Pension Restructuring Premiums (PRP)
In 2012, a change was also introduced whereby promotions which resulted in the change of band or grade at the numerical level i.e from band 4 to band 3, would be treated as pensionable for future service only.
This is done by the creation of a Pension Restructuring Premium (PRP) which then forms part of your Pensionable Pay and captures the value of your promotion as pensionable, from the date of your promotion to your date of either leaving the RPS or retirement.
For example, for someone with a promotion which has changed their band at the numerical level i.e from band 4a to band 3a, this will be captured as follows:
For details on how a PRP factors into the calculation of your RPS pension, please visit: https://www.mynrpension.co.uk/how-your-rps-pension-works/
For a more information about Pension Restructuring Premiums (PRPs) and how they affect your RPS pension, please read the Pension Restructuring Premiums (PRPs) factsheet.